Question

(1) A bond will mature in 30 years. It has a 7% coupon rate and will pay annual coupons. If the bond has a face value of $1,0

4. Both Bond A and Bond B have 6% coupons, make semiannual payments, and are priced at par value. Bond A has three years to maturity, whereas Bond B has 20 years to maturity. If the interest rates suddenly rise by 2 percent point to 8%, what is the percentage change in the price of Bond A and Bond B? If rates were to suddenly fall by 2 percent points to 4% instead, what would be the percentage change in the price of Bond A and Bond B then?

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Let say the bond A and B par value is 100 and they are also priced at par Bond A Bond B 100 3 Face value Coupon payment Numbe

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